Economic Buzz: Bank Of England Intervenes In Bond Market To Restore Stability

29 Sep 2022 , 02:42 PM

The Bank of England decided to intervene in the government bond market to reduce any risks from contagion to credit conditions for the real economy, following the chaos developed in the currency and gilt markets after the governments massive tax cuts announced in the mini-budget last Friday. The bank said it is monitoring developments in the financial markets very closely, as announced at the start of the week, in light of the significant repricing of UK and global financial assets. In order to restore market functioning and avert the risk of contagion, the bank decided to undertake temporary purchases of long-term government bonds from September 28. The purchases will be carried out on whatever scale that is necessary to restore orderly market conditions, the central bank added. In addition, the BoE postponed the selling of bonds held under the quantitative easing program to October 31, which was initially due to commence next week. Powered by Commodity Insights